Bears held tight grip on the Dalal Street in Tuesday's trading session, with the Sensex and the Nifty losing over 0.60% each. After a cautious start, key indices remained sluggish during the whole day, as the Central Goods and Services Tax (GST) collection fell short of the budged estimate by nearly 40% during the April-November period of 2019-20. Adding more worries among market participants, a private report indicated that India is expected to witness a marginal 7 per cent rise in job creation in the October-March period of this financial year, as subdued economic conditions have dampened employment outlook. Bourses extended their losses in second half of the session to settle near day's low points, after rating agency, Fitch Ratings said that India's non-banking financial companies will look increasingly to offshore financing as local funding conditions may remain under pressure. The rating agency expects offshore access to be restricted to larger entities with stronger credit fundamentals. Traders also took a note of Minister of State for Finance Anurag Singh Thakur's statement that the recent spike in retail inflation is mainly due to high food prices and the government is taking steps to moderate the volatility in prices. Finally, the BSE Sensex lost 247.55 points or 0.61% to 40,239.88, while the CNX Nifty was down by 80.70 points or 0.68% to 11,856.80.

Following the modest pullback seen over the course of the previous session, the US markets ended marginally lower on Tuesday, as a looming December 15 deadline for additional tariffs on Chinese goods. The weakness on markets came as traders digested the latest report on the trade front, with House Democrats announcing an agreement on President Donald Trump's trade deal with Canada and Mexico. The deal will allow the United States-Mexico-Canada Agreement, or the USMCA, Trump's replacement for the North American Free Trade Agreement, or NAFTA, to move forward in the House. House Speaker Nancy Pelosi, D-Calif., called the new agreement much better than NAFTA and argued changes negotiated by Democrats make the deal infinitely better than what was initially proposed by the administration. The news of the USMCA deal came on the heels of conflicting reports regarding trade talks between the US and China. On the economic data front, revised data released by the Labor Department showed US labor productivity dipped by slightly less than originally estimated in the third quarter. The report said labor productivity edged down by 0.2 percent in the third quarter compared to the previously reported 0.3 percent drop. The modest decrease in productivity in the third quarter compares to the 2.5 percent jump in productivity seen in the second quarter. Meanwhile, the Labor Department said unit labor costs surged up by a revised 2.5 percent in the third quarter compared to the previously reported 3.6 percent spike.

Crude oil futures ended higher on Tuesday on report that US and Chinese negotiators were laying the groundwork for a delay in a fresh round of tariffs set to kick in Sunday. The report indicated that the parties continue to haggle over how to get Beijing to commit to massive purchases of US farm products President Trump is insisting on for a near-term deal. Besides, oil prices also got a boost from expectations that a US government report Wednesday will reveal a second straight weekly decline in domestic crude inventories. Meanwhile, the Short-Term Energy Outlook report from US Energy Information Administration (EIA) said US crude production will likely drop to 12.25 million barrels a day in 2019, which is down 0.3% from the November forecast. The EIA has cut its 2020 US output forecast by 0.9% to 13.18 million barrels a day. Benchmark crude oil futures for January gained 22 cents or 0.4 percent to settle at $59.24 a barrel on the New York Mercantile Exchange. January Brent added 9 cents or 0.1 percent to settle at $64.34 a barrel on London's Intercontinental Exchange.

Rising for the fifth consecutive day, Indian rupee ended marginally higher against dollar on Tuesday, on continued selling of the American currency by exporters and banks and easing crude oil prices. Sentiments remained buoyant with Chief Economic Advisor KV Subramanian's statement that the current slowdown in the Indian economy is more cyclical than structural in nature and the government has a well-thought-out agenda for reforms. He noted that the country's potential growth remains unaltered and things will improve soon. Besides, dollar's weakness against some currencies overseas supported the rupee. However, gains remain capped as anxiety remained among the traders with a private report indicating that India is expected to witness a marginal 7% rise in job creation in the October-March period of this financial year, as subdued economic conditions have dampened employment outlook. On the global front, dollar and yen held the safe-haven high ground on Tuesday, with investors on edge ahead of a looming tariff deadline, the UK elections and upcoming central bank meetings in Europe and the US. Finally, the rupee ended at 70.92, 12 paise stronger from its previous close of 71.04 on Monday.

The FIIs as per Tuesday's data were net buyers in both equity and debt segments. In equity segment, the gross buying was of Rs 4448.71 crore against gross selling of Rs 3715.34 crore, while in the debt segment, the gross purchase was of Rs 2290.20 crore with gross sales of Rs 2246.63 crore. Besides, in the hybrid segment, the gross buying was of Rs 23.08 crore against gross selling of Rs 23.50 crore.

The US markets ended in red on Tuesday as investors awaited concrete news on whether a new round of US tariffs on Chinese goods would take effect on December 15. Asian markets are trading mostly higher with marginal gains on Wednesday amid repro that Sino-US trade talks approached a weekend deadline with little sign of progress. Indian markets ended lower with cut of over half a percent each on Tuesday amid the broad-based selloff, dragged by IT, metal, and banking stocks. Today, the start of session is likely to be cautious amid higher crude oil prices and concerns over domestic economy. There will be some cautiousness with former chief statistician of India, Pronab Sen's statement that India's GDP growth is likely to hit a decade low of 4.5% in the current financial year ending March, and the government should stick to its Budgeted expenditure plan even if it means fiscal slippage. Traders will be concerned with report that direct tax collections, net of refunds, for the April-November period grew just 1.6% against the required rate of 17.4% to achieve the budget estimate of Rs 13.35 lakh crore for the current fiscal. Traders may react to a private report that the Asian Development Bank (ADB) lowered its growth forecasts for developing Asia this year and the next, saying persistent trade tensions have taken a toll on the region. However, some support may come later in the day with Union Surface Transport Minister Nitin Gadkari's statement that the government would spend a whopping Rs 5 trillion over the next two years in infrastructure projects to spur the economy and create thousands of jobs. Traders may take note of report that the Federal Reserve is expected to conclude its December meeting on Wednesday afternoon by signaling it's in no hurry to do anything to change its neutral stand on interest rates. Meanwhile, a report of the Parliamentary Standing Committee on finance was tabled on Tuesday in the Parliament. The report suggests that the government has begun a review of Goods and Services Tax (GST), including possible resetting of GST rates and slabs. There will be some buzz in the banking stocks with CRISIL's report that banks' retail credit growth is up due to higher reliance on securitisation by liquidity starved non-banking lenders, and does not represent a higher credit pick-up by small borrowers. Metal stocks will be in focus with ICRA's report that growth in domestic steel demand slipped into negative territory in the first two months of the third quarter of FY20 (October and November), recording a marginal de-growth of 1.8 per cent year on year (Y-o-Y). There will be some reaction in power stocks with the Central Electricity Authority's data showing that India's power demand fell 4.3% in November from a year ago, representing the fourth straight month of decline.

       Support and Resistance: NSE (Nifty) and BSE (Sensex)

Nifty Top volumes

• Hero MotoCorp is all set to make an upward revision in the ex-showroom prices of its motorcycles and scooters, effective January 1, 2020. 
• Tata Motors Group's global wholesales in November 2019, including Jaguar Land Rover, were at 89,671 nos, lower by 15%, as compared to November 2018. 
• Wipro has signed a MoU with the Ministry of Technology and Communications, to launch Center of Excellence for open source.  
• ICICI Bank has opened new service center in Bahrain in Middle East.